History is written by the victors, said Winston Churchill, referring to the ability of those with authority to shape public perception. But with a decentralised network, there is no single point of authority to create this uniform narrative, and through bitcoin’s short history the community has been free to think of the cryptocurrency however it chooses.
This has resulted in a range of perspectives, which have been compiled in a recent study titled ‘Visions of Bitcoin’, chronicling the rise and fall of major bitcoin narratives within the community.
In the study, Nic Carter and his fellow researcher Hasufly have closely analysed historic posts on the BitcoinTalk forum, revealing how perceptions of bitcoin have altered over time. According to Carter, this relies heavily on prior work from Murad Mahmudov and Adam Taché, who also outlined competing theories of bitcoin in previous Medium posts.
Seven stories about Bitcoin
Almost a decade ago, bitcoin’s whitepaper was published online, and the same network has been running ever since. But as it has developed, the stories surrounding it have changed significantly.
Progress therefore, has been slowed by lack of agreement on what bitcoin actually is. Multiple factions have emerged, all with different conceptions of how bitcoin should function, and different views on which direction the protocol should take.
Carter and Hasufly’s research breaks these differences down into seven distinct narratives, from the e-cash proof of concept, to a cheap p2p payments network; censorship-resistant digital gold; private and anonymous darknet currency; reserve currency for the cryptocurrency industry; programmable shared database, and uncorrelated financial asset.
“We identify seven distinct major themes that have held positions of prominence among Bitcoiners throughout its history. Note that these do not necessarily have to be the most influential narratives — we are instead focusing on major strains of thought that have characterized Bitcoin users.”
Although the methodology used to define these seven narratives is unclear, their significance has been weighed, and mapped onto a chart illustrating how the popularity of each narrative has waxed and waned over time.
While some of these narratives might peacefully coexist, with some having significant overlap and peacefully merging into each other over time, others represent a direct threat to the existence of alternative ideas.
When bitcoin was just a whitepaper, for example, there were relatively few narratives that could be applied—mainly the idea of “electronic cash proof of concept” which soon transitioned into the idea of a “cheap payments network” as the infrastructure developed.
As bitcoin ages, however, more and more different interpretations of the protocol emerge, and not all of them can coexist. It is unlikely, for example, that an anonymous currency could also be used in mainstream financial products like ETFs, or equally, that ‘digital gold’ can be compatible with the idea of a cheap p2p payments network.
These competing ideas came to a head with the contentious bitcoin cash fork of 2017, where debate over scaling techniques concealed ideological disagreements over Satoshi’s original vision and the real purpose of bitcoin.
The dominant narratives
According to Carter, the dominant narratives today are bitcoin as a censorship-resistant form of electronic gold, bitcoin as a reserve currency for crypto, and bitcoin as an uncorrelated financial asset.
As the data shows, the idea of “bitcoin as a cheap payments network” has now fallen to the wayside, with the idea that bitcoin can function as a “digital gold” taking precedent over the idea of it providing cheap and efficient payments to populations worldwide.
The newest narrative on the chart, however, and one that Carter suggests will continue to grow, is that of bitcoin as an uncorrelated financial asset. This is where bitcoin is conceived in relation to the traditional financial world as an asset with a unique risk profile—a way of adding “bitcoin-flavoured risk” to diverse investment portfolios.
This idea of bitcoin as a regulated financial asset, however, is probably not compatible with the idea of bitcoin as an “anonymous darknet currency”. A conflict which Carter suggests could be the cause of the next “bitcoin civil war.”
This is an outcome that is unlikely to help anyone’s cause, and the study finishes on a peaceful note, urging the community to remember that just like the people that use it, bitcoin itself is capable of reconciling a wide range of different views: “Bitcoiners are not ideologically homogeneous. Bitcoin contains multitudes, and it’s important to remind ourselves of that.”